The Department of Commerce (DOC) has issued an amended version of the semiconductor supply chain Notice of Funding Opportunity (NOFO), commonly referred to as “NOFO 2.” This NOFO is explicitly geared toward projects that would construct, expand, or modernize semiconductor materials facilities or semiconductor manufacturing equipment facilities. Initial concept plans will be accepted until November 1, 2026.
DOC released the first version of NOFO 2 in September 2023. While the amended version maintains the focus on upstream suppliers of semiconductor manufacturing materials and equipment, it differs in several key aspects from the original. Outside of the application deadline extension, some of the most notable differences include the following.
- Project Cost: The amended NOFO 2 removes the $300 million cap on individual projects but argues that individual projects under $20 million are unlikely to reach a scale necessary for achieving strategic objectives.
- Cost Sharing: The amended version lacks a cost sharing requirement but notes that individual applicants "must be able to demonstrate that they have sufficient resources available to complete the proposed project, when combined with the requested CHIPS Incentives."
- Fab Clusters: NOFO 2 includes a focus on supporting "the development of vibrant, sustainable semiconductor clusters" by, for example, "reducing the burdens associated with transporting critical supply chain inputs."
Evaluation Criteria: Proposals will be evaluated using the following five criteria:
- Economic and National Security
- Commercial Viability
- Financial Strength
- Project Technical Feasibility and Readiness
- Workforce Development
Available Funding: The amended NOFO 2 does not specify a total amount of available funding, which is a departure from the September 2023 version, which set aside $500 million for the entire endeavor.
Eligible Applicants: Eligible applicants include private sector organizations, non-profit organizations, consortia of private sector organizations, and consortia of private, public, and/or nonprofit organizations “with a demonstrated ability to substantially finance, construct, expand, or modernize a facility relating to the fabrication, assembly, testing, advanced packaging, production, or research and development of semiconductors, materials used to manufacture semiconductors, or semiconductor manufacturing equipment.”
Application Structure and Deadlines: Initial concept plans will be accepted until November 1, 2026. DOC will notify applicants that have been invited to submit full proposals on an individual basis.
Sources and Additional Information:
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Ben Kallen is Sr. Manager, Public Policy & Advocacy at SEMI.
